Reasons Why Bitcoin Price Is So Volatile

Price variances in the Bitcoin spot price on the Bitcoin trading exchanges is driven by many reasons. Volatility is assessed in classic markets by the Volatility Index, also called the CBOE Volatility Index (VIX). Volatility in Bitcoin does not yet possess a completely accepted index since cryptocurrency as a real asset class is still in its beginning stages, but we do understand that Bitcoin is able of volatility in the form of 10x adjustments in price compared to the US dollar, in a fairly short period of time. In this article are just a handful of the various factors in back of Bitcoin's volatility:

1. Rate of ownership is affected by negative press.

News situations that frighten Bitcoin users consist of geopolitical incidents and statements by government authorities that Bitcoin is most likely to be controlled. Bitcoin's first adopters covered many mal actors, generating headline news stories that created worst fears in investors. Headline producing Bitcoin news involves the bankruptcy of Mt. Gox in early 2014 and even more lately that of the South Korean market exchange Yapian Youbit, and others like the high profile employ of Bitcoin in drug deals via Silk Road that finished with the FBI shutdown of the market place in October 2013. All these occurrences and the general public panic that ensued forced the value of Bitcoins compared to fiat currencies down quickly. Nevertheless, Bitcoin polite investors viewed all those events as proof that the marketplace was growing, generating the value of Bitcoins vs the US dollar substantially back up in the brief period instantly following the information events.

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